Cover Catastrophe: The Perils of Annual Insurance Policies on Cruises

Everyone likes getting a little extra when they make a purchase, right? Just a small something as a perk or incentive to help us feel we’ve got good value for our money.

Banks, credit card companies, home and car insurance brokers – financial services providers in general, in fact – are very good at this. When you go to open up a bank account these days, or take out a new credit card, you are offered a lot more than the plain old financial product you were looking for.

It might be you get discounted cinema tickets bundled in with your new account. Or cash back for using your card at certain high profile retail outlets. Or, you might just get free travel insurance thrown in.

Free travel insurance? Great! That’s one less thing you have to think about when you book your next trip. Even better, the type of policy you are offered will be annual travel insurance, covering you for a full 12 months, for as many trips as you like.

It sounds like a fantastic deal. Except you have to be very careful about what these bundled in travel insurance policies do and do not cover, especially if you are booking a cruise.

Avanti Travel Insurance, a specialist provider of policies for the over 50s and for people travelling with pre-existing medical conditions, explained.

Photo By: Russell Otway (For Cruise Hive Only)

A special case for cruises

“The danger with these packaged annual policies that banks and financial services providers give away as incentives is not that they offer only a basic level of cover – plenty of policies do that.

“It’s the fact that they lull people into a false sense of security. Instead of shopping around for a policy that meets their needs, they gratefully accept the free gift without giving it too much thought. The tendency is to assume that you now have travel insurance and don’t need to think about it until the renewal comes up.

“But this is fraught with danger, especially if you are booking a cruise. Cruises can create very specific sets of circumstances that require very specific insurance cover. If you fall ill or get injured on a cruise, for example, the medical costs are much higher than if you need to see a doctor or go to a hospital on land.

“The levels of medical cover included in a generic annual policy are just not high enough to account for this. If you did fall ill and needed, say, to be airlifted to a hospital from the cruise ship, you would end up facing an enormous bill.

“That is why it is so important that passengers are correctly guided to specialist cruise travel insurance policies. Even if you have an annual policy, either one you got for free or bought yourself, you should still take out cruise travel insurance. And not just for the higher medical cover, either – cruise policies give you enhanced protection for luggage loss or damage, and for cancellation reimbursements in the event that the cruise itinerary changes, which they frequently do.

“We know that people as a rule do not read the small print on travel insurance policies. But not enough is being done to explain what packaged annual cover does and does not protect people for. It is important that the industry as a whole steps up to improve this, and to explain the value and importance of products like cruise travel insurance, to ensure all holidaymakers are properly protected.”